Why Dell Technologies stock is on fire today, and why it doesn’t have a whole lot to do with legacy PCs

Shares in Dell Technologies Inc (NYSE: DELL) are on fire today after the legacy PC maker and AI server manufacturer announced Q1 results that blew past all expectations. And yes, AI is the driving factor behind Dell’s stellar quarter. Here’s what you need to know. Dell reports 757 year over year growth in AI server revenue On Thursday after the closing bell, Dell reported results for its first quarter of fiscal 2027, which ended on May 1. The results were nothing short of remarkable. For Q1 2027, Dell reported 88 year-over-year revenue growth for the quarter, which totaled 43.8 billion—a quarterly record for the company. Adjusted earnings per share (EPS) reached 4.86, representing growth of 214. To put those numbers in perspective, analysts expected Dell to post significantly lower revenue and EPS. According to CNBC, analysts had expected quarterly revenue of around 35.43 billion and an adjusted EPS of 2.94. Dell easily blew past those expectations. And a big reason why comes down to the success of its Infrastructure Solutions Group (ISG) during the quarter, which handles the company’s servers and data center products. Dell’s ISG saw 181 year-over-year revenue growth during the quarter to 29.0 billion. But what is most staggering is the division’s AI-Optimized Servers revenue. This is the revenue that Dell’s ISG takes in from its AI server business. AI-Optimized Servers revenue came in at 16.1 billion, representing a massive 757 year-over-year growth. Compare the growth of the company’s enterprise and AI division with the Client Solutions Group (CSG) division inside Dell that deals with its legacy PC and computer sales, and it’s easy to see just how much Dell’s enterprise and AI products are the driving growth factor for the company. The CSG took in 14.6 billion in revenue for the quarter, representing just 17 year-over-year growth. Dell sees AI fueling sales in Q2 and fiscal 2027 Investors are obviously ecstatic over Dell’s Q1 results, but their enthusiasm for the company’s stock this morning also likely has a lot to do with the company’s revised guidance for both its current Q2 and its full-year fiscal 2027. Dell expects demand for its AI products to be a driving factor in its growth during these two periods. Specifically, Dell says it now expects Q2 2027 revenue to come in between 44 billion and 45 billion, with a midpoint that would represent 49 year-over-year growth. Analysts were expecting just under 35 billion in revenue for Q2, per CNBC. As for its full fiscal 2027, Dell now says it expects total revenue of between 165 billion and 169 billion. The midpoint of 167 billion would represent 47 year-over-year growth. CNBC notes that analysts had been expecting just 142.5 billion in revenue for fiscal 2027. And Dell says its growth outlook for fiscal 2027 AI-Optimized Servers revenue is even greater, in percentage terms, than for its total revenue. It expects its AI-Optimized Servers revenue to be “roughly 60 billion” for fiscal 2027, representing year-over-year growth of 144. “We booked 24.4 billion in AI orders and recognized 16.1 billion of AI serverrevenue [in Q1 2027],” Dell’s chief operating officer, Jeff Clarke, said. “We’re increasing our AI server revenue expectations for FY27 to 60 billion, which only goes to show the AI opportunity shows no signs of slowing.” DELL stock surges on AI optimism Dell’s Q1 results and future 2027 guidance have sent the company’s stock price surging this morning. Currently in premarket trading, DELL shares are up more than 33 to 423.99 as of the time of this writing. Yesterday, the company’s share price closed at 317.05. But even before today’s premarket surge, Dell shares have had a great run since the year began. As of yesterday’s market close, the company’s stock price had increased by more than 151 since the start of 2026. Over the past 12 months, DELL stock has risen by more than 178. Much of that stock price rise can be attributed to Dell’s inroads into the AI server market and the overall AI boom the tech industry is experiencing. Dell’s current stock price is now the highest it has ever been since the company went public for a second time in December 2018. (It was taken private in 2013). As of yesterday’s close, the value of DELL shares has grown by more than 1,200 since its second IPO.